Introduction

Although the keeping of birds as pets and the feeding of wild
birds has a long history, bird keeping and outdoor feeding have seen a
tremendous increase in the past decade. The interest in keeping birds as pets is
in line with the general increase in the number of households that keep pet
animals, and birds rank fourth after dogs, cats and fish. This increase can
partly be explained by the increase in leisure time and disposable income, and a
shift in demographics (rising proportion of elderly and retired people in the
total population and an increase in single-person households) in industrialized
countries. At the same time, over the past two decades, people have become more
conscious of nature and wildlife in general, which explains the explosive growth
in outdoor feeding, wildlife habitat creation and wildlife
observation.

Although statistics for birds as a group are hard to come by,
some data are illustrative. In the United States of America 4.6 million
households keep 12.6 million companion birds, an 8 percent increase over the
number in 1996 (AMVA, 2001). In addition, in the United States of America, 52
million people regularly feed wild birds, spending US$2.7 billion on food plus
an estimated US$800 million on feeding accessories. In Australia, 1.2 million
households (19 percent of all households) own 8 million pet birds, spending
US$300 million on food and accessories[4]. The
United Kingdom market for companion bird food amounts to 1600 tonnes with a
retail value of US$2.6 million. At the same time, the United Kingdom is one of
the leading countries in outdoor feeding with an estimated expenditure of US$200
million[5]. The French Pet Food Manufacturers
Association estimates that one in six households in France own companion
birds[6].

Market segments

The global bird food market can roughly be divided into the
following sectors:

Pigeons. This is a separate
sector due to the nutritional needs of pigeons, especially if they are used for
racing.

A related segment, which is growing in importance, is cover
crops for hunting or wildlife habitat creation. It is included here because many
of the small grains that are commonly used in bird food are also used in cover
crops mixes and, in addition, contain other seed species of tropical and
subtropical origin.

Ingredients of bird food

Bird food for companion birds and wild birds consists largely
of mixes of small whole or broken grain. In addition to grains, bird food may
contain dehydrated fruits and berries, peanuts, rice, dried egg, honey, dried
insects, grits, and mineral and vitamin supplements. Mixes can be relatively
simple and consist of one or two different grains. An example is standard
budgerigar mix, which will typically contain canary seed and white millet seed
(proso millet). Some mixes, especially those for exotic birds like parrots, may
contain 20 to 25 different ingredients. The most complex mixes are found in
so-called treats[7].

Typical caged bird food contains between 12 and 16 percent
protein, 12 percent fat, 6 to 10 percent fibre, and has a maximum moisture
content of 11 percent. In addition to dry mixes, birds may be offered sprouted
seeds, which are rich in vitamins and also are easily digested. Seeds for
sprouting are sometimes sold in mixtures and may contain any of the following:
mung beans, safflower, quinoa, sorghum, millet, lettuce seeds, Niger seed, proso
millet and other cereal seeds. Seeds are soaked for several hours and then
germinated for 24 to 48 hours.

Origin

Although many of the ingredients are of tropical and
subtropical origin, most of them are also cultivated as large-scale agricultural
crops in North America. Sorghum (known in the United States of America as milo),
millets, maize, safflower, sunflower and groundnut are readily available
commodities. The only major birdseed species that is predominantly grown in the
tropics is Niger seed, which is produced in India, Nepal, Ethiopia and Myanmar.
Niger seed has recently been introduced into the United States of America as an
alternative crop for grain growers.

Substitution

Most of the grain crops that are used as ingredients in bird
food have their main market in human or animal nutrition. Only canary seed and
Niger seed are used exclusively for bird food in the industrialized world. One
implication of this is that components of bird food are often rejects for human
or animal consumption, or rejects from the seed industry. For instance,
sub-standard grain for the milling industry can still find an outlet as bird
food. The same applies to undersized striped sunflower or sunflower kernels that
become de-hulled during transport, or seed crops that do not meet germination
standards. Depending on the price of commodities, formulators of bird food can
easily switch between crops, which makes the market volatile. However, at the
same time, in order to make an attractive product presentation, packers will
include a certain percentage of seeds like canary seed, Niger seed and sunflower
seed, irrespective of the price of the commodity.

Trends

The bird food market is currently growing at a rate of 4
percent per year, in line with changing demographics and increased disposable
income and an increase in outdoor activities and environmental awareness. Within
the packing and distribution sectors, it is likely that there will be further
segmentation and brand creation to target niche markets. Appearance of the seed
mix and packaging of the product will become more important as marketing tools.
In wild bird feeding, which was traditionally a winter occupation, there is a
trend towards promoting outside bird feeding during spring and
summertime[8].

At the same time, since the 1990s, consumers have become more
discerning of bird food composition and more knowledgeable about which seeds are
preferred by certain bird species. For instance Niger seed is attractive to
finches while black sunflower is particularly attractive to larger beaked birds.
In order to attract certain species and discourage others into their gardens or
balconies, consumers make more and more demanding choices.

In caged and companion bird feeding there is debate over the
merits of seed mixes versus extruded formulated balanced diets in pellet form.
The nutritional requirements for caged birds are still poorly understood, but
research conducted since the 1990s indicates that the traditional grain mixes
(supplemented with minerals and vitamins) may lead to unbalanced protein intake,
shortage of essential amino acids, or lack of vitamins or trace minerals. The
new forms of food have a consistent and balanced dietary composition, which
should overcome these imbalances. During the production of pelleted extruded
bird foods, alternative raw materials that are not traditionally used for bird
feeding, such as soybeans, can be used. The use of these alternative grains
allows processors more flexibility in their choice of raw materials, but
competes with the traditional grains. The growing acceptance of, and shift
towards, these formulated diets could in the long term reflect negatively on the
use of small grains in grain mix bird foods.

Breeding of exotic birds has, since the 1990s, become an
important hobby in the industrialized countries and large sums of money are
being paid for breeding pairs of exotic species. To keep breeding birds in
optimum condition and to ensure high breeding rates and longevity, high demands
are made on quality bird food that provides a balanced diet. With the breeding
of exotic birds comes a new class of food, which can be used for hand rearing
chicks. This specialised food is high in proteins, calcium and vitamins and is
marketed as "egg-food".

The growing trend to treat companion animals as members of the
family who deserve the best possible care and the longest possible life
expectancy leads to the demand for premium pet foods with perceived health
benefits. It is therefore to be expected that the market for organically grown
food, GMO-free food, special treats and food containing exotic ingredients will
expand in the coming years.

Major players

Brokers

Commodity brokers are the link between the producer of
commodities and packers or wholesalers. There are a number of brokers who have
departments that specialize in bird food commodities. In the United States of
America, commodity brokers specializing in bird food tend to be concentrated in
the High Plains (especially in Nebraska and the Dakotas), which is the main
sunflower and millet growing area of that country. Appendix 2 lists the major
brokers, wholesalers and packers of bird food.

Packers/wholesalers

Packers and wholesalers[9] buy
bird food ingredients from brokers or import independently. They may pack
own-brands or supply packing and formulation services for third party brands. In
keeping with other industries, the pet food industry has seen a large degree of
consolidation. Many of the smaller national companies have merged or been taken
over in recent years. Large players in the pet food industry include the
multi-national companies Nestlé (Ralston Purina, Friskies), Proctor &
Gamble (bird food brand Iams), Mars (bird food brand Trill), Heinz
and Colgate-Palmolive.

Retail

In the United States of America, the large supermarket chains
such as Walmart, Winn Dixie and Kroger retail large volumes of bird food. For
these supermarkets, bird food is a high value/margin product and considerable
space is devoted to it, especially towards the autumn and winter seasons.
Supermarkets account for about 50 percent of all bird food sales in the United
States of America. In addition, there are two large chains, PetSmart and Petco,
which each have about 500 stores in the United States of America.

The situation in Europe is different in that more bird food is
retailed through garden centres and specialised pet shops, rather than through
large supermarket chains. The last five years have seen a proliferation of
Internet-based bird food retailers. Typing the words "bird food" into an
Internet search engine such as Google[10] will
generate thousands of Internet references to websites offering this
product.

[4] Source:
http://www.petnet.com.au[5] Source: Personal
communication from a leading United Kingdom producer.[6] Source: FACCO
(http://www.facco.fr)[7] Kaytee Cockatiel Exotic Nut
Treat stick, for example, contains 55 different ingredients including mineral
and vitamin supplements.[8] Spring and summer feeding
of wild birds is officially endorsed by the Royal Society for the Protection of
Birds (RSPB) of the United Kingdom.[9] There is not always a clear
distinction between brokers and packer/wholesalers, and several companies
combine these functions.[10]http://www.google.com